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Top shares for June 2019

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Edward Sheldon: BAE Systems

My top stock for June is defence specialist BAE Systems (LSE: BA). Its share price has taken a knock over the last year on the back of concerns over the group’s ties with Saudi Arabia, yet I think investors’ fears in relation to this particular issue may be overblown.

A recent update from BAE in early May was quite positive, with CEO Charles Woodburn stating that the group has a record defence order backlog and that the business is well positioned for growth going forward. As such, with the shares currently trading on a P/E ratio of around 10 and sporting a dividend yield of nearly 5%, I see considerable value on the table here.

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Edward Sheldon owns shares in BAE Systems


Rupert Hargreaves: FirstGroup

Since May 2017, shares in FirstGroup (LSE: FGP) have fallen by around a third excluding dividends. 

However, the company is now being targeted by activist hedge fund Coast Capital, which is calling for a breakup of the business. The market seems to like this plan. FirstGroup’s shares have jumped 19% over the past five weeks. 

As of yet, it’s not clear if FirstGroup will follow Coast’s advice, but the ideas certainly seem to make sense, and if management does decide to shake up the business, I can see significant returns for investors from here. 

The stock is currently dealing at a depressed eight times forward earnings, leaving plenty of room for upside if sentiment improves. I think it might be worth following Coast Capital on this one.

Rupert Hargreaves does not own shares in FirstGroup.


Kevin Godbold: Hikma Pharmaceuticals

I think the immediate and ongoing prospects for the FTSE 100’s Hikma Pharmaceuticals (LSE: HIK) are interesting. The company produces generic medicines, which puts it on the other side of the equation from the likes of GlaxoSmithKline and AstraZeneca who have been trouble by their branded drugs timing-out of patent protection.

Hikma has a decent record of raising its dividend annually for several years. Meanwhile, a trading update in May reported a good start to the year fuelled by recent product launches. Operations appear to have momentum, and I think the share price could move higher, perhaps as early as during June.

Kevin Godbold does not hold shares in Hikma Pharmaceuticals, GlaxoSmithKline or AstraZeneca.


G A Chester: Centamin

I continue to rate FTSE 250 gold miner Centamin (LSE: CEY) as my top stock to buy right now. I like the company’s large resource and reserve base, robust balance sheet and strong cash flow generation. This underpins a forecast dividend yield of 4% this year, rising to 5.8% next year.

Furthermore, Brexit, deepening political divisions in wider Europe, the US’s trade war with China (and ‘Thucydides Trap’ risk) are just some of the uncertainties supportive of a stronger gold price. And potentially a much higher price, in the event of a more wholesale flight to safety by investors.

 G A Chester has no position in Centamin.


Royston Wild: Unilever

Unilever (LSE: ULVR) is a share that I myself own and one which I’d be very happy to buy some more of in the days ahead.

Why? Well on the back of its reputation as a safe-haven stock in tricky times, one which has grown earnings each and every year whatever the weather, that’s why. Whilst the broader FTSE 100 has shaken lower during the past five or so weeks, reflecting growing concerns over Brexit and US-Chinese trade wars, Unilever’s share price has advanced almost 10%.

With both of these crises escalating there’s no reason to expect the household goods leviathan’s buzzing price ascent to run out of steam, clearly, and particularly as sterling continues to crumble (the pound fell for an unprecedented 13 days on the spin against the euro in May, giving an extra boost to Unilever’s earnings).

So disregard the company’s high forward P/E ratio of 22.3 times, I say; in my eyes it remains a very-attractive blue chip buy as of today.

Royston Wild owns shares in Unilever.


Peter Stephens: AstraZeneca 

The prospects for AstraZeneca (LSE: AZN) have improved significantly in the last couple of years. Investment in its pipeline has prompted improving financial performance that is expected to lead to a 12% rise in earnings in the current year.

While investor sentiment has improved in response to its growth potential, AstraZeneca has a PEG ratio of 1.7. This suggests that it could offer increasing growth at a reasonable price, while a dividend yield of 3.7% could boost its total return.

As a result of the uncertainty presently facing the world economy, pharma stocks with defensive business models could increase in appeal. This could further catalyse AstraZeneca’s share price.

Peter Stephens owns shares in AstraZeneca


Fiona Leake: Boohoo Group

After a couple of uncertain years, Boohoo Group (LSE: BOO) has bounced back with profits climbing a huge 48% in the past year. Boohoo’s other brands, PrettyLittleThing and Nasty Gal, have both increased by 107% and 96% this year respectively. This is thanks to the power of social media, with many celebrities and influencers promoting the brand.

Boohoo has also seen great success in the US this year with all three brands up 79%, giving the company a brilliant growth opportunity. I am confident that Boohoo can outperform many fast-fashion retail stores thanks to the online-only business model. The company has diverse income streams from multiple brands and, after cracking the US market, I can see this stock continuing to rise in June and throughout the year.

Fiona Leake does not own shares in Boohoo Group.


Manika Premsingh: Spectris

For June, I like the FTSE 250 company Spectris (LSE: SXS), which supplies measures for industrial applications. It recently posted a healthy trading update, with a sales increase of 3%. This, along with largely rising revenues and operating profits over the years, ticks my boxes for a share to consider for long-term investing. Its outlook — which focuses on margin improvement — is a positive as well, considering that it expects macro-economic and geo-political challenges going forward. The share price ran up 2.6% from the previous day when the update was announced, and I reckon that it will rise more in the next month, since its price to earnings ratio of 16.5x makes it affordable compared to peers.

Manika Premsingh has no position in Spectris.


Roland Head: Telecom Plus

Utility reseller Telecom Plus (LSE: TEP) is better known to customers as Utility Warehouse. This firm buys utilities, including phone, broadband and mobile, and then resells them to its members.

Recent years have seen tough trading conditions, mainly due to a surge in the number of cut-priced energy providers. But the market is coming back to Telecom Plus and a recent trading update showed that customer numbers rose by 4% last year.

Cash generation is good and the group’s 3.6% dividend yield is backed by a strong record of growth. I think this could be a good alternative to conventional utility stocks.

Roland Head does not own shares in Telecom Plus.


Paul Summers: Begbies Traynor

With a market capitalisation of a little under £80m, my pick might not be familiar to many retail investors. Nevertheless, I continue to believe that insolvency specialist Begbies Traynor (LSE: BEG) is a great option for those searching for counter-cyclical stocks.

Last month’s trading update was encouraging with the company enjoying a strong finish to its financial year. Indeed, revenue and profit for the 12 months to the end of April will now be “comfortably ahead” of what the market previously expected. These numbers will be confirmed on 9 July.

With falling debt, decent dividends and a bumper order book, I suspect the stock — on a little less than 15 times earnings — still offers quite a bit of value.

Paul Summers owns shares in Begbies Traynor


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The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended AstraZeneca, boohoo group, Hikma Pharmaceuticals, and Spectris. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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